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Score one for the big guys as judge sides with Bell in battle with VMedia over future of TV

An Ontario Superior Court has sided with Bell in its fight with VMedia over the upstart IPTV provider’s so-called “skinny basic” cable package offered through an app on a digital media player.

But the judge also appeared to suggest the law could be updated to reflect changing technology.

In his decision, Judge Fred Myers wrote, “VMedia has infringed Bell’s rights under the Copyright Act by proceeding without Bell’s consent to simultaneously communicating CTV and CTV2 over-the-air television copyrighted works through VMedia’s new service that is delivered and accessed over the internet.”

“Without a doubt, we are surprised and disappointed by the decision,” said VMedia’s George Burger.

“This is acknowledged to be not a clear area of the law. VMedia believed that it had a legitimate interpretation of the law and sought the court’s direction to validate that interpretation. The court decided otherwise.”

At issue was VMedia’s new service, which offered a so-called “skinny basic” cable package through a Roku app.

Roku, like AppleTV or Google’s Chromecast, is a digital media player that allows users to stream content from the internet on their television.

Basic cable for $17.95

In September, VMedia started offering the package for $17.95 a month. The offer does not require a specific VMedia internet subscription.

Signing up for the package meant anyone with a Roku player and their own internet subscription could have access to about 20 live television channels, including CTV, CBC, Global, as well as U.S. networks ABC, CBS, NBC, Fox and PBS.

Shortly after it launched, Bell Media sent a cease and desist letter threatening legal action if VMedia did not remove Bell’s CTV and CTV2 signals from the new service.

Bell contended VMedia was violating the Copyright Act by retransmitting its signals over the internet.

In court VMedia argued that — like cable and satellite companies — it is a licensed Broadcasting Distribution Undertaking (BDU), which is generally allowed to retransmit over-the-air TV signals at no cost.

It’s free over the air, why not over the internet?

VMedia’s lawyer said there is nothing in its licence that says retransmission can’t be over the internet.

Bell argued that VMedia’s licence only allows it to retransmit signals over a private managed network, between the customer and VMedia’s server, not the open internet.

“We’ve said all along that VMedia was redistributing CTV and CTV Two signals outside of its broadcast distribution business and without our agreement, a clear violation of our copyright.” Bell said in a statement.

“The court agreed, confirming that internet distributors don’t get to use copyrighted content for free.”

And yet, as a cable company, Bell is entitled to retransmit some copyrighted content for free.

In fact, Bell and other cable and satellite companies argued hard — and successfully — at the Supreme Court against a system that could have seen cable companies required to pay TV stations for their signals.

Law could change

In his decision, Judge Myers wrote he ruled only on the existing law.

“If technology has overcome the existing laws and policies,” Myers wrote, “it is open to interested parties to put the issues before the CRTC to try to revise the policies and definitions discussed below. This decision says what the law is. It is for others to determine what the applicable law ought to be.”

Myers also awarded Bell $150,000 in costs.

“Frankly, the award of the costs feels somewhat punitive,” said VMedia’s Burger.

Burger says they’re still considering whether or not to appeal the decision or perhaps bring an application before the CRTC.

The case clearly raises questions about the future of technology and how Canadians watch TV.

“I think this is a gigantic issue. And how this goes forward really has a lot to do with how Canada treats innovation,” said Burger.

“Because there was ample opportunity here for the court to take different points of view on this issue. And the one that was taken was the one that is most disadvantageous to the people who are seeking to innovate. And that is very problematic.”

Bell, though, disagreed.

“With CraveTV, GO apps, and more, Bell Media clearly supports innovation in broadcasting. But a company that simply retransmits another company’s content without permission isn’t innovating.”